The Hong Kong Stock Analysts Association offers suggestions for optimizing the Hong Kong stock market trading: It recommends "one hand, one share" as a long-term reform vision.

The Hong Kong Society of Financial Analysts has formally submitted a feedback letter on the consultation paper issued by the Hong Kong Stock Exchange on the "Optimizing the Trading Unit Size Framework in the Hong Kong Securities Market." The association supports the direction of reform to simplify the trading unit size framework proposed by the stock exchange and suggests a long-term reform vision of "ultimately unifying to one share per unit." The Chairman of the Hong Kong Society of Financial Analysts, Tang Shengxing, stated that the current issuer-led trading unit system has led to over 40 different trading unit sizes in the market, increasing the complexity of trading, settlement, and clearing processes, as well as the difficulty of hedging operations and product coordination. Standardizing the trading unit size would help enhance the operational efficiency of the secondary market and align with the long-term interests of the market's development. The association supports reducing market complexity through standardizing trading unit sizes and generally accepts eight options (1 share, 50 shares, 100 shares, 500 shares, 1000 shares, 2000 shares, 5000 shares, and 10000 shares). Tang Shengxing pointed out that reducing the number of trading unit sizes from over 40 to eight is a significant improvement, but compared to other major exchanges, the design of eight unit sizes still presents certain system burdens and investor cognitive costs. Electronic trading in the U.S. market generally supports trading in single shares, and the Japanese market has been unified to 100 shares since 2018. The association proposed further clarifying the long-term reform vision of "ultimately unifying to one share per unit." This proposal is based on two considerations: firstly, seizing the opportunity for dematerialization. The association supports the stock exchange in coordinating the standardization of trading unit sizes with the implementation of the dematerialized securities market plan. Based on this, it is suggested to further study transitioning to the "one share per unit" ultimate goal through a "one-time institutional switch" after full dematerialization implementation. This would not only solve the problem of unit size diversity but also avoid the costs arising from future adjustments. Secondly, announcing a long-term roadmap. It is suggested that the stock exchange clearly publicize a long-term reform roadmap - transitioning in the short term to eight unit sizes, monitoring the market's adaptation in the medium term, and aiming for the long term goal of "one share per unit" or "unifying to 100 shares." This would help market participants plan system upgrades and business adjustments early. The association also stated that the stock exchange has taken into consideration the uniqueness of the Hong Kong market, where there is a higher proportion of stocks with low prices (56% of securities have prices below 1 Hong Kong dollar) and fixed trading costs. Therefore, the immediate unification of trading unit sizes was not hastily implemented but rather proposed as a phased standardization of a practical solution. This step-by-step approach can strike a balance between enhancing market efficiency and maintaining market stability. The association agreed to lower the lower limit of the trading unit value guideline from 2000 Hong Kong dollars to 1000 Hong Kong dollars. This adjustment is in line with the current situation for three main reasons: Firstly, over the past decade, with most fixed costs replaced by fees charged based on trading amount, the execution costs of small trades have significantly decreased. The consultation paper indicates that the execution costs for a 2000 Hong Kong dollar trade have decreased from 23 basis points in 2015 to 11 basis points in 2025, indicating that lowering the guideline lower limit is a sensible move. Secondly, lowering the limit to 1000 Hong Kong dollars helps reduce the investment threshold, allowing more retail investors to participate in the market and enhance overall market liquidity. From a risk perspective, the analysis in the consultation paper shows that lowering the limit to 1000 Hong Kong dollars would only increase the daily transaction volume by around 1.9%, a manageable impact. Further lowering the limit to a lower level could significantly increase the risk of negative trading and system pressure, which is not advisable at the current stage. The association agreed to introduce an upper limit of 50000 Hong Kong dollars for the trading unit value guideline and supported that this limit only applies to issuers with trading units greater than 100 shares. The value of this proposal is reflected in several aspects: on one hand, it can address the bottleneck of retail investor participation. The analysis in the consultation paper shows that when the unit value exceeds 50000 Hong Kong dollars, the retail investor participation rate significantly decreases. Introducing the limit can help solve the issue of high entry fees for some high-priced stocks, enabling retail investors to invest in more high-quality stocks. On the other hand, it helps align with international practices. Applying the limit to issuers with trading units greater than 100 shares can support the long-term goal of possibly unifying trading unit sizes and facilitate stock connect trading, supporting issuers listed on both A-shares and H-shares to unify trading unit sizes in both markets. Additionally, implementing this as a guideline at this stage provides clear direction for issuers and allows room for adjustments based on their own circumstances, striking a balance between flexibility and constraint.